eToro’s UK managing director, Iqbal Gandham, has stressed the evolving nature of cryptocurrencies when debating whether cryptocurrency is too volatile to be taken seriously as an investment.
At a networking breakfast, attending by Private Banker International (PBI) publication, Gandham from online trading and cryptocurrency platform, eToro , said cryptocurrency is “an evolution of currency”.
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“We started off with gold, to printing money and now we are generating money on computers,” said Gandham.
He then commented on where the problem lies with the volatility of cryptocurrency: “I think the problem is that experts are having conversations about something that has not been developed.”
This poses the question are cryptocurrencies so volatile because of underlying negative statements made in the market?
One example of this would be when JP Morgan’s CEO Jamie Dimon claimed Bitcoin was a fraud, during a conference in New York in 2017.
Dimon reportedly said: “The currency isn’t going to work. You can’t have a business where people can invent a currency out of thin air and think that people who are buying it are really smart.”
He added: “It’s worse than tulip bulbs. It won’t end well. Someone is going to get killed.”
Soon after Dimon’s comments, bitcoin fell as much as 2.7% trading at $4,106.23 in New York.
Uninformed
This reinstates Gandham’s view that conversations and opinions are being formed around a currency which is new and innovative, and something that is still not fully understood by everyone.
Mark Ward, head of trading at Sanlam, sat on the panel. He stated: “When buying into cryptocurrency you’re buying into a digital algorithm. It allows bartering to happen online between people who don’t know each other.”
Gandham hopes that Bitcoin will evolve to a point where society will be using it as a currency to pay for consumer goods. But to get to that point confidence in investing in cryptocurrencies needs to drastically increase.
The experts’ comments come after Nigel Green, the CEO of deVere Group, recently said Ripple, third largest cryptocurrency by market capitalisation, is forecast to “convert the remaining crypto cynics”.
Green, whose global financial advisory firm launched a crypto exchange app, deVere Crypto, this year, noted that Ripple has also recently broken some key resistance, such as $0.6500 and $0.6600, nudging it towards the important $0.7000 level against the US dollar.
He commented: “After the cryptocurrency market somewhat overheated at the end of 2017 – thanks largely to investors piling in, pushing Bitcoin to an all-time high of more than $19,000 – there was a major, natural price correction in the first quarter of this year of most of the major cryptocurrencies.
“But the cryptocurrency market is, once again, now looking already significantly more bullish than it did in quarter 1.”
Cryptomania
Wealth managers and private banks have reacted to ‘cryptomania’ in different ways, but there is a consensus that blockchain technology, which drives cryptocurrencies could revolutionise wealth management.
In terms of those players in the fast lane for cryptocurrencies, Swiss private bank, Falcon, stands outbeing the first to offer Blockchain asset management solutions for its clients.
